Ken Sofio - Director of Investor Relations Wendell Weeks - President and Chief Executive Officer Jim Flaws - Vice Chairman of the Board, Chief Financial Officer

Ajit Pai - Thomas Weisel Partners John Anthony - Cowen & Co. Michael Walker - Credit Suisse C.J.

Muse - Lehman Brothers Nikos Theodosopoulos - UBS Warburg Tim Daubenspeck - Pacific Crest Securities Jeff Evanson - Sanford Bernstein Steven Fox - Merrill Lynch John Harmon - Needham & Company Daryl Armstrong - Smith Barney Citigroup Brant Thompson - Goldman Sachs

Wendell Weeks, President and Chief Executive Officer will join for the Q&A. Now before I turn the call over to Jim, you should note today’s remarks do contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements do involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially. These risks are detailed in the company's SEC reports.

Jim.

Thanks Ken, good morning every one. Last night we released our results for Q3 which can be found on our Investor Relations website.

In addition, for those of you with web access, we have posted several slides this morning that will summarize the important data from this morning’s prepared remarks. These slides will be available on our website after our call as well.

Overall regarding our Q3 results, we were very pleased with our excellent performance. Our LCD volume exceeded the top end of our guidance range and our EPS was $0.02 above the top of our guidance range and $0.03 above consensus.

Perhaps, most importantly, the LCD business rebounded from a supply chain pause in Q2 and gives us excellent momentum heading into Q4. Our Q3 sales were $1.28 billion and slightly higher than our Q2 sales.

In comparison to the Q3 of last year, sales were up 8%. Without the impact of the weakening in the Yen year-over-year sales would have been up over 9%.

Our EPS before special items is $0.28 and exceeded the top-end of our guidance range. Net profit after tax, excluding special items in Q3 was $451 million, an increase of 7% over Q2.

In comparison to Q3 of 2005, net profit after tax excluding special items was up $41 million or 10%. You should note that EPS and net profit after tax excluding special items are non-GAAP measures.

A reconciliation GAAP can be found on our website. You should also note that Q3 sales and net income was slightly impacted by unfavorable changes in foreign exchange rates in comparison to Q2.

Our excellent Q3 results were driven primarily by strong volume and performance in the display segment. You may recall from our last conference call, we entered Q3 with quite a bit of uncertainty regarding the display supply chain.

Panel makers have been reducing their utilization rates quite severely. At that time we said in order for the supply chain to improve three events needed to happen.

1. There had to be normal seasonality at the end market particularly for IT products.2.

Assuming the full Korean market demand occur, we should see a reduction in panel inventory levels.3. As inventory levels of panel makers fell we should see an increase in their utilization rates and in turn the increase in glass orders.

Clearly, based on the results from our display segment our hopes were rightly placed. And by and large most of the other segments performed as expected.

I’ll get into the details about each segment’s performance in a few minutes. Continuing down the income statement, gross margin in Q3 was 44%, an increase over Q2 gross margin of 43% and higher than our expectations.

Higher gross margins were driven primarily by the strong buying and manufacturing performance in the display segment. SG&A was $218 million in Q3 or 17% of sales as expected.

RD&E was $127 million in Q3 and fairly consistent with Q2 also as expected. Interest income was $32 million in Q3, up $6 million sequentially.

The increase is primarily reflection of the higher cash balance we had during the quarter. Equity earnings were $232 million in Q3 compared to $256 million in Q2.

As a reminder, Q2 equity earnings included a $33 million gain in Dow Corning. Excluding that special item, equity earnings were up $9 million quarter to quarter driven primarily by Dow Corning.

Our tax rate in Q3 was 13% just slightly lower than our guidance range of 15% to 20%. The lower tax rate was primarily the result of a reassessment of our annual corporate tax rate.

For your modeling purposes you should use an estimate of 13% to 15% in Q4. Our share count for Q3 was 1.593 billion shares and consistent with Q2.

We have one special item in Q3; we recorded a pre-tax and after-tax charge of $13 million primarily reflecting the increase in the market value of Corning common stock, to be contributed to settle the asbestos litigation related to Pittsburgh Corning. Corning share price increased during the quarter from $24.19 million to $24.41 million.

Including the special item our Q3 EPS was $0.27 per share. I’m referring to the segments now.

Starting in display, sales were $506 million in Q3, a 10% increase over Q2 sales of $461. Sequential volume gains were 16% and slightly higher than the upper end of our guidance.

Price declines were similar to Q2 as expected. The impact to the Yen to the US dollar exchange rate was slightly negative.

In comparison to Q3 of last year sales in the display segment were 3% as volume gains of 31% were largely offset by price declines and foreign exchange rate changes. Equity earnings from SCP were $135 million in Q3 and slightly higher than Q2 equity earnings of $133 million.

SCP sequential volume growth in Q3 was 11% and price was down slightly. Q3 price declines were consistent with Q2 and not as significant as we had expected given the extended timing of the contract negotiations with their Korean customers.

Re-modeling purposes SCP Q3 sales were $536 million compared to $513 million in Q2. Year-over-year volume growth at SCP was 38%, sequentially total LCD glass volume including our fully-owned business plus Samsung Corning Precision was up 13% in Q3.

In comparison to a year ago total LCD volume growth for the first three quarters was up more than 50%. Net income in the display segment, which includes equity earnings, was $395 million in Q3, or 15% compared to $343 million in Q2.

The increase in net income was primarily the result of higher volume, strong manufacturing performance in our wholly-owned business. Our gross margin percent in Q3 increased in comparison to Q2 despite another quarter price declines.

As a reminder Q2 had the impact of the lightening strike. Let me now update you on the supply chain as specifically the panel inventory situation in more detail.

As I mentioned earlier, we believe there was an important improvement in the panel inventory levels during Q3. This improvement is a result of seasonal and market demand and strong annual shipments.

I will table my comments on the end market just a moment. I’ll start with panel shipments, as a reminder our working assumption was been a substantial portion of the panel inventory in the supply chain, was a time when these panel makers although clearly LPL had also been public about their own inventory levels.

Taiwanese panel makers have reported monthly panel shipment data through Q3 and the news has been very encouraging. Many have reported record shipments in July, August and September.

Inventory levels have fallen in Q3, the number of day’s inventory and probably Q1. Inventory reduction combined with seasonal demand improved with Q3 as a result of the substantial improvement in materialization rates.

We believe the Taiwanese on average increased their fab utilization rates which were in the 55% range in June, 70% in July, 85% in August, and 90% in September. Although clearly not every company is operating at that level, we believe that the average utilization rate for the Taiwanese panel makers is now equal to where it was in March.

Obviously the most encouraging sign has been the strong last volume we experienced in the Q3 and our expectations for Q4 based on customer orders, which I’ll talk about a few minutes. Now let me walk you though the end market trends in Q3.

As always I would like to stress we don’t have perfect information. We use a variety of sources ranging from services that are available to use, such as display research, along with retail tracking vendors, our own discussions with customers as well as our own models.

With that in mind you should also note that the following data has been derived from the aggregate of industry sources that are considered at this time to be preliminary estimates. Final data for Q3 will not be available for another month or so.

Be clear the data we reference relates to shipments from PC manufacturers, television set makers to the retailers. In summary the preliminary data indicates that the end market shipments were in line with our expectations for Q3 and on track for all three primary applications, notebooks, monitors and televisions.

Starting with notebooks, about 19.6 million were shipped in Q3, in line with our expectations. This was an 11% increase over the notebook shipments in Q2.

We believe the penetration of notebook computers of all computer sold in Q3 was 36% and consistent with Q2. Moving to LCD monitors, about 32 million were shipped in Q3 compared to 13 million in Q2.

We believe the penetration of LCD monitors inched up from 79% in Q2 to 82% in Q3. For LCD televisions about 10 million were shipped in Q3 also in line with our expectations.

This represents an 11% increase over Q2 shipments of 9 million. More importantly is that the penetration of LCD television into the color television market was an estimated 21% for Q3.

As a reminder these percentages are preliminary at this time. You may recall during our last conference call, we estimated LCD television penetration to be 19% in Q2.

After reviewing the final data we conclude the penetration was actually 21%. Based on this trend and the expected strong seasonal demand we believe LCD television penetration may be as high as 25% in Q4, an average of 22% this year.

Now for your modeling purposes I would like to provide an update on our glass mix. The glass mix of GEN 5 and higher in Q3 was 86% up from 84% of Q2.

Mix of GEN 5.5, 6, 7 and 8 glass was 49% in Q3 up from 48% in Q2. You should not that our GEN 8 capabilities continue to ramp as we prepare to begin shipping larger quantities to Sharp.

They in turn begin to ramp their fab towards full production starting in Q4. As the contract majority glass supplier for Sharp’s GEN 8 fab we are excited about this growing opportunity.

EAGLE XG our new extra green glass continues to be a strong success. The current requests from our customers to convert to the new glass outweigh our ability to supply at this time.

While this is a good problem to have we are working diligently to convert more of our capacity over to produce EAGLE XG. To date we’re in the process of supplying four different panel makers of EAGLE XG at various generation sizes.

Before I move on to the environmental segment I would like to address the news stories and analysts reports about a tank repair at one of our main competitors. First you should note there has been no official announcement directly from our competitor today.

We have received enquiries from customers about the availability of more glass in Q4. We certainly have the inventory capacity to meet additional glass orders during Q4.

We do not expect this even to have an impact in overall glass pricing, it’s pricing for Q4 as previously negotiated. Now moving to the environmental segment, sales in Q3 were $153 million and consistent with the Q2.

We were very pleased to announce our long-term supply agreement with Cummins Engine a few weeks ago. This multi year supply agreement for our DuraTrap® and Celcor® to help Cummins comply with the US regulations for the medium and light duty engines beginning January 1st.

I know many investors have been waiting for us to formally announce the names of our heavy-duty customers. Unfortunately, even though we have commitments in place with other engine manufacturers, we have to receive permission to use their names in a press release.

So far only Cummins has agreed to this but we are optimistic we will be able to announce others in the near future. To date we have commitments from engine makers to supply more than 50% of the US heavy-duty market.

I want to also update you on a very important milestone that occurred recently. This month the EPA announced the implementation of ultra low sulfur diesel fuel at all retail terminals.

This is great news for our technology and great news for the environment. Ultra low sulfur diesel fuel is 97% less sulfur than standard diesel.

The difference of 500 parts per million versus 15 parts per million, which is a major milestone and was always part of achieving the 2007 emissions regulations. In the Life Sciences segment, sales in Q3 were $68 million compared to the Q2 sales of 75 million.

Segment incurred a loss of $8 million in the Q3 compared to the loss of $2 million in Q2 due to the lower sales and our continued investment and researching development for new products in Q2. One of those new products is Epic; I hope you saw our product launch announcement last month.

Epic is a high-throughput label-free screening platform based on our proprietary optical biosensor technology. System performs both biochemical and cell based drug discovery applications and offers drug developers the ability to evaluate promising new drugs.

So far we have received encouraging preliminary interest from potential customers. We’ll hear more about this exciting technology during our annual investor meeting in February.

Now turning to the telecom segment, sales in Q3 were $456 million, a 3% decrease from Q2 and in line with our guidance. In comparison to a year-ago, our Q3 sales were up 15%.

Sales of hardware and equipment products were $215 million in Q3 compared to $238 million in Q2. Decline was primarily due to lower fiber-to-the-premise sales in North America, and fiber-to-the-node sales in Europe.

Sales in our fiber and cable products in Q3 were $241 million, slight increase over Q2 sales of $234 million. The increase is primarily due to strong cable, project sales, partially offset by lower fiber demand in North America and lower prices.

Fiber-to-the-premise sales were $64 million in Q3, a decrease of about 25% which was a very strong Q2. In comparison to year-ago, fiber-to-the-premise sales were up about 40%.

Net income of the telecom segment was $20 million in Q3 compared to $40 million in Q2. Decline was primarily result of higher mix of lower margin products and anticipated price declines.

I’m sure you all saw Verizon’s announcement last month on their commitment to their fiber-to-the-premise project through 2010 and we are certainly pleased by the news. We never doubted Verizon’s commitment to the project; they historically waited till the end of the year to announce their plans for the upcoming year.

We are also pleased by their connection rate projections over the next several years. This is a key revenue opportunity that I think many investors do not understand.

As you know there is a significant opportunity for revenue each time Verizon passes a home and we also get a second bit of revenue apple if you will, every time Verizon connects a home. As a result there is a second stream of revenue opportunity for us that we hope will build as Verizon passes more homes to market their service to their communities.

Equity earnings from Dow Corning in Q3 was $78 million compared to $104 million in Q2. As a reminder Q2 equity earnings from Dow Corning included the $33 million one time tax gain.

Excluding this gain, the equity earnings from Dow Corning were up 10%, primarily due to the strong demand in Poly-Si. Now turning to the balance sheet, we ended Q3 with $2.8 billion in cash and short term investments up from $2.5 billion in Q2, while significant cash in-flow was the proceeds from $250 million in long-term debt and the price debt repurchased in Q2.

Most significant outflow in Q3 was $338 million capital expenditures. Free cash flow was $76 million in Q3 and almost $200 million to date.

We remain on track for a third year in a row of positive free cash flow. Free cash flow is a non-GAAP measure.

I’d like to wrap up by providing guidance for Q4. We are expecting revenues in the range of $1.28 billion to $1.33 billion and EPS in the range of $0.26 to $0.29 per share for special items.

In our display segment, we are forecasting sequential volume growth for wholly-owned business to be up 20% to 30% in Q4. Regarding LCD glass pricing in our base business, we expect price declines to be consistent with Q3.

At SCP, we are expecting sequential volume to be up 8% to 12% in the Q4 and with consistent price declines for Q3. Regarding the Q4 volume range for wholly-owned business, I want to take a moment to explain the wider range.

As a reminder, it’s our theory based on the experience last year the supply chain becomes fairly contractive during Q4, even demand for LCD television essentially doubles in the short time frame, and this was evident last year when 32-inch televisions were sold out in Q4. We believe it’s very difficult for the supply chain to have enough products to satisfy this huge surge in Q4 demand and maintain a healthy supply of inventory.

We believe this in turn caused a slight demand and supply chain not only deals with the Q4 but also replenishes the supply of LCD televisions through out the channel in preparation for Q1 demand. Given the inherent uncertainty of the extent of the contractions in supply chain but was prudent to provide a wider volume range.

We still believe the overall glass market growth is on track 40% to 50% this year, with both SCP and our wholly-owned business volume up more than 50% of the first three quarters and our expectations for Q4 volume is clear, both are on a pace to grow near the top end of that range. I know many of your will ask if we are gaining market share, I remind you that it’s to difficult to estimate market share in the given quarter but a much clearer picture of the overall market some time in January.

However, if Q4 volume is as strong as we are expecting we believe we will have the potential to gain some share. I would like to make one point on our volume guidance recipe, although the range is less lower than our homely own business please remember they have experienced growth every quarter this year, including Q2 when our wholly-owned business volumes actually declined 14%.

Lastly I’ll like to return to my comments on the potential of Corning getting extra demand (inaudible) manufacturing problems. While we welcome the opportunity to help our customers, we were looking at a very strong Q4 to start with.

This potential extra demand is nice but it is not the reason that we are planning on such a strong Q4. In our telecom segment, we expect Q4 sales could be down 20% to 25% compared to the Q3.

Anticipated decline in sales will be a combination normally saw after seasonal demand and lower project related volume. Our Q4 telecommunication results were also being impacted by full quarter of lower prices, which are as a result of contract negotiations with customers during the latter part of the Q3.

We detected some disappointment last night in calls after our release regarding our telecom sales broadcast. So I would like to comment on the decline in Q4.

First, our telecom sales for the full year will be up 10% versus 2005, we adjust for the Japanese sales we moved into the join venture. We are delighted with the 10% increase in the decline in the price; second, we are seeing very different ordering patterns this year in two of our major telecom projects.

Actually, 2004 and 2005 were different also, it’s different in 2006. We don’t think this reflects any change in the part of the customer’s intent nor any competitive weakness, and lastly as you there was seasonality in the telecom market in Q4.

Regarding our other segments we expect sequential Q4 sales for our environmental segment to be consistent with Q3. So this departure for the normal Q4 declines you’ve previously seen in the segment but we expect our sales to be seasonally lower decline should be offset by higher diesel product sales.

US Heavy-duty engine manufacturers are currently in the process of building inventory that would be complaint with the new mission regulations beginning on January 1st. We begin to see the benefit from the ramp in Q4.

This ramp will be slightly slower than we originally expected and the truck makers buying the engines in advance of the new mission regulations. We expect Q4 sales in our Life Science segment, begin on slightly on a sequential basis in a normal seasonality.

The sales and other reportable businesses are expected to be up by 10%. Now moving down the income statement for your modeling purposes.

Gross margins for the company should be between 44%, 46%. Earlier our ability to hit the upper end of range would be depended on supply volume and the extent with the decline in telecom.

SG&A is expected to be between 17% and 18% of sales, increase in SG&A in Q4 will result with normal seasonality. RD&E is expected to be around 10% to 11% sales in Q4.

We anticipate equity earnings in Q4 to be flat to down 5% compared to Q3. And our quarter net equity earnings are expected to be down 5% to 10% during the normal seasonality in the silicon industry.

As I mentioned before regarding our tax rate for your modeling purposes you should use a range of 13% to 15%. Lastly you should again use 1.59 billion shares for Q4 when calculating EPS special items.

One other comment on share count as I’ve mentioned in previous calls you should expect some executive selling after our quarterly announcements next week. As always, for executives who decide to sell stock, we encourage to use in the period immediately after our quarterly earnings announcement.

One note on the impact of foreign exchange on our guidance, we merely do not forecast any change in foreign exchange guidance for translation purposes within our guidance. Our guidance for Q4 assumes a yen to dollar rate of approximately $1.18 for translation purposes.

If the yen to dollar rate averages $1.23 in Q4, we would estimate that our sales would be impacted by $25 million and MPAT by $20 million. The range included projected benefits for (inaudible) from our currency hedging program.

Our capital spending for the year looks like it will be around $1.3 billion or the lower range of our previous guidance range. I would like to address the story that circulated yesterday that we have frozen our display capacity editions in Taiwan.

This is not true. As investors know we pay certain capacity editions by the use of modular or smaller tanks to try and match our view of the end market demand that we’ll see.

Continuing to bring up (inaudible) year will be so again next year. We are also continuing our expansions in Japan and Korea it will be proven in China to get ahead of the market, but we expect to continue to be the market leader and supply our customers’ needs in GEN 5, GEN 6, GEN 7.5 and GEN 8, Ken.

Thank you Jim. Lisa, we are ready to take some questions now.

Yeah good morning and congratulation and a very solid quarter.

Thank you.

Couple of quick questions. The first one would be just about the glass pricing environment, you did mentioned that you are not going to see the benefits of any sort of shortages in glass in Q4, but to give us some color as to whether the supply demand situation make things look better for 2007 and at what point would the contracts for 2007 and pricing be decided?

Well thanks for your comment Ajit. First, it’s just too early to offer much guidance on what’s going to happen in 2007 with pricing and glass demand supply balance.

With that said, I’ll offer a few things that are worth thinking about it. I’m going to do it from order of easiest to understand to those that is going to take more time for us to understand and to get better insight on.

The first is the impact of mix. Historically mix so or a greater percent of our sales being greater than GEN 5 than previous year’s would offer a positive impact on average pricing even though the product line level are you will continue to have price decline.

Given that such a large percent of our volume is already greater than GEN 5, we would anticipate that we wouldn’t be getting that sort of mathematical upward pressure in the average. That’s one thing to think about with your models.

Second is the point that you’re getting in, which is glass supply demand balance. We would like to wait until we see how the yen market behaves in Q4 to be able to give us some insight as to what the glass demand and supply balance will look like going into next year.

Especially noting, what does the strength of LCD penetration look like in the 40 to 50-inch range, very large size TVs, because that has a very significant impact both to our customers’ outlooks, their capacity plans are of course it consumes a lot of glass. Finally and I think it’s going to really takes some time for us in the industry to understand is what the impact of the seasonality pattern of LCD demand.

You heard Jim just speak about it in the opening comments, where such a large percent of LCD TV is being bought in Q4. The industry behaves seasonally and I think what’s going to be key is how do our customers adjust, do not overreact to the seasonality as well as the glass industry.

So sorry, we can be a little more clear at this time but we still like to see a little more data.

But in terms of GEN level of confidence of the generational ship and glass you do have GEN 8 that is ramping, that you know, historically you’ve had sort of a high teen’s premium on higher generation glasses. Are you still seeing that and do you still see like maybe two or three years out box to a higher generation of GEN 8?

Sir, we are still getting a premium on the new larger size and -- but remember just one GEN 5 against all these embedded base now, all this GEN 6 it’s you know, we don’t just don’t get the same mix benefit that we did before. Actually and the year that mix benefit helped us most on pricing was actually 2004, it’s much less in ‘05 and nothing this year.

Unless everybody started the GEN 8 fab, which is not going to happen, we really are not looking for much impact or mix benefit. Just a comment relative to our competitors, competitors don’t look like they are rolling price as much as you are.

They are actually now finally getting the mix benefit because the first time they are entering, they are shipping more of the larger sizes, whereas we are not.

To your question on GEN sizes beyond GEN 8, we are working on that now and we would think that we will have customers who will go larger than GEN 8 and seek to get even higher productivity on those very large-size TVs. But it’s too early to call timing.

Okay and the last question will be about telecom segment. Just looking at the kind of visibility you have especially after listening to the Verizon call I’m getting some visibility there.

When do you expect your -- to start ramping and what’s the capacity utilization broadly in the industry right now for fiber?

So there is still more capacity then there is demand, in fiber we don’t see that situation changing any time soon. We’ve been able to productivity gained to continue to get more and more out of Wilmington facility.

So at this time we don’t have plans to ramp up.

Thank you so much and congratulations again on a very solid quarter.

Thank you.

Good morning guys, couple of things I just want to clarify on the comments with the competitor in possibly picking up additional orders. So to state the obvious the guidance that you gave was for your business on a run rate basis.

If customers were to comeback to you it would be additive if they needed additional capacity. I just want to make sure that’s not reflected in the glass guidance.

No, it is reflected in the glass guidance.

It is? Okay.

People are putting too much emphasis along the size of this -- potential of the customer, one competitor -- it’s nice to have a little bit extra. We are going to have very strong quarter even without that.

Okay, thanks and then on the environmental business. Can you just give us a sensible when you expect any sort of inflection to come in that business and how much of the current demand is been mass by some weakness and the traditional environmental businesses?

Well, we past the low point on diesel earlier this year and in Q4 we’ll see nice increase in revenues and our gross margins will continue to climb. It’s our expectation that we will pretty much see this build every quarter next year.

We clearly are going through a slower ramp than what we original hope because of the big pre-buy and a lot of model change over it in the sense that engine manufacturers are incurring in Q1. But you know, I mean we’ve hit -- the inflection point has happen with the roll out of the regulations.

So now we start climbing what we hope every quarter next year and our gross margins will be improving every quarter also so we are feeling quite good about that.

Okay and the last thing. I know you are not giving guidance for 2007, but could you give us a sense for the direction of capital spending?

Capital spending might be slightly down next year for the corporation.

Great, thank you guys.

Thanks good morning. The question on, you know, just the broad kind of high level ‘07 outlook in the glass business I think back in the spring when you’d had your analyst day you kind of threw a couple of numbers out there for the ‘07 timeframe.

For instance, I think in the vicinity of 29% penetration LCD TVs it sounds like it’s going to be end up been well that work to about 60 million TVs, display search without saying, do you think it could be 66 million Sharp has raised the numbers, just wondering, I don’t want to preempt your ‘07 Analysts Day but just wondering if your expectations to turn the glass volume demand for ‘07 are starting to look low?

There is no question about it. I mean we will official revise at the February day, but you know our current thinking right now could be 33% penetration.

We are clearly -- we are delighted, we show our recent announcement about their very bullish view, the demand for 2010. So we will update it but there is no question about it, we are seeing stronger tele division in the end and the other thing I think it’s equally exciting is the average size of the television is creeping up, you know, that was one of the surprises, it must had been at the end of Q4 last year largely got and we are delighted by the retail pricing that we are seeing on 40 to 42 inch televisions when (inaudible) this morning and he is about to buy a new television and its almost sitting his price point.

Okay, and then I just have a quick follow-up on the telecom side, if you could get a little more color on that being down 20% to 25% monthly average, that’s quite a bit more than normal seasonality, is this entirely on the long haul metro side of the businesses, is there an FPTP impact, I think (inaudible) was complaining about as the inventory bills in their O&T business for Q4 as reducing their outlook, is there a connection to that at all?

Let me start and I will let Wendell jump in. I think it’s important to remember that our year over year telecom revenues were actually up 15% in Q3.

If you looked at Q3 of ‘05 versus ‘04 they are actually down 3%, so we were coming off of very strong quarter, and part of this is we are not seeing a consistent pattern in the ordering fiber-to-the-premise equipment, some of which can be inventory related but some of it can just be the buying habits of our customers. Wendell, do you want to add on to that.

I think Jim has got it very accurately. As those of you who have been following us for a while will know you have heard us say consistently that we are delighted with our fiber-to-the-premise product offerings and our product offerings for fiber in the access that the customer demand, the number of customers are doing major projects just isn’t enough yet to get more consistency.

So we are very reacted to major customer in the US and the major customer in Europe and what’s happening at their project and their project buying patterns. So, as a result you can’t get much insight from mining the seasonality data yet, you have to step back and look at the way Jim just been in his comments.

Okay, thanks.

Yeah, good morning, couple of questions. I guess you follow-up on that question on telecom you know, you’ve said a weakness in fiber to the premises and down taking ASPs further weakened the guide for Q4 but I guess you are talking about roughly $100 million revenue down tick for telecom, fiber-to-the-premise running $60 million to $70 million.

There is got to be something else somewhere so can you sort of help me understand that?

So we are seeing a down tick in fiber-to-the-premise which is partially unit driven and also the price reductions. As when I mentioned we are seeing a drop off in Europe were a similar large customer is backing off on the amount they were putting in.

We are seeing private networks to be down a little. I can’t think we can determine any rhyme or reason to private networks because it’s a very important part of our business and a very profitable part, but never has a consistent ordering period.

We are seeing a little bit of weakness across the base, so you are talking about and you know, an $80 million down tick, but remember it’s coming off of the you know, a very good Q3 compared to a year ago. We don’t think that any of these customers with the possible exception in Europe where there may be a change in regulations that any customer is changing their intent here.

Okay, so in terms of the earnings contributions in telecom dropping from $0.03 to $0.01, I don’t know what’s for Q4 in the last three quarters, did it change your thinking about how you mange this business whether you try to change the cost structure at all?

Well, we’re -- I mean we have been trying to reduce our cost in this business on a consistent basis and actually we ended up more in terms of kind to reduce our fiber cost as we go forward but we are not changing our fundamentals of our view to telecom market just based on just one quarter. As I have mentioned before the total year revenue from this business is going to be up 10% year-over-year to take up the sale that we put through the joint venture now in Japan and that’s 10% after the price declines that’s the biggest increased we had in telecom a long time.

So we are delighted that the business has been profitable last two quarters. We think that there will be return to ordering from the customers as they move in ‘07 as they work on these projects.

So we like to understand the telecom but we always work on a reduce cost.

Sounds good, I guess moving over to displays, Jim, you talked about LCD gross margins directionally higher. Can you give some sort of sense in magnitude, you know, if I flat-line your gross margins for a non-display businesses that would suggest display was up about a 100 fabs, does that sound right?

No, it’s much more than I remember in Q2 we have, you know, we took (inaudible) from the lightning strike so our gross margins were excellent in Q3 as we got rebound not only with the volume but also manufacturing and the absence of the lightning strike. So we had excellent gross margin and we hope to again in Q4.

Would you expect to see the increase in Q4?

No I’m not going to make any forecast on it, but you know we think -- we hope that we’ll be able to do well, in their holding we are been down slightly on gross margin, but we are delighted to be back where we are after the low level in Q2.

Got you, and I guess final question for me, for pricing for glass, you know, I’m calculating for glass pricing down to 3.7% and for SCP down about 3.5% you know assuming roughly down 2% for assets. Are those numbers sort of in the ballpark?

Actually we are little bit higher on the core (inaudible) with the SCP demand about 3% I guess.

Okay great, thank you.

Yes I have a couple of quick questions. I guess the first one is you know given the volatility in the quarterly unit growth in the LCD business.

We have tended to see inventory corrections occur more frequently given the significant changes in quarterly unit shipment. Are you concerned with this 20% to 30% sequential guidance versus what the panel makers are talking about their Q4 shipment levels that could be an inventory building going into Q1 next year?

I think it varies customer by customer what the expectation is. So I think that some of the Koreans have been more public on lower number so our guidance in the Korean part of our company SCP is more in line with what they are talking about.

We are seeing very strong demand in Japan and Taiwan and we are not sensing that there is any inventory building but that’s one of the reasons why we gave the wider guidance of 20 to 30 because it’s possible that people get in the middle of December and say well maybe we put too much. But we are not sensing that people are building inventory I mean any rapid rate.

I think one of the things which is most important for us is Wendel, earlier is how the entire supply chain got to be dealing with the impact of the seasonality, now that the television is part of the glass this year were in the mid 30% of the use of the glass but obviously higher in Q4 going to television. So first of all, what our retail is going to do is a huge part of their revenue is in television.

So they are going to try to do something in the first half of the year or they are always going to dependent on the November, December period. Second, how do our customers -- panel makers react to it?

There was a big learning a year ago I think, they wanted to build inventory in Q1 and have to take it out in Q2. Will they be operating differently?

And then how do the glass makers operate? Because we ourselves are thinking about how we operate, not go through the cycle correction logistic.

I’m not sure I would say they are happening more frequently. I think the last employee correction was really around four, many significance here but we clearly need to deal with the seasonality.

Okay, and just two quick other ones. On the gross margin in telecom with the new pricing that’s taking effect in Q4.

As you look out to ‘07, assuming you have growth in the business 5% to 10%, something in the range you did this year, it just seems like your gross margins will not be up next year for telecom, I mean. Can you expand the margins to the telecom business with the new pricing given similar type of revenue growth next year?

Well, I think the right time for us to talk about telecom for next year will be when we do our annual session. That being said, because I wouldn’t overestimate the impact of the latest pricing negotiations.

We have been doing this a long time. And what we always seek to do is continue to improve our productivity as well as new product offerings that help us lever our renovation base.

One of those, for instance, in the fiber to the premise area is what we call (inaudible) where basically we do everything. We pre-engineer and preconnectorize all the product in our factory then just drop shift it right at the given neighborhood and at the exact spot where they are needed.

All a customer has to do is plug-and-play and when it’s buried they got a big attention plug and play. So that type of dynamic is actually probably more important to our revenue picture as well as what do our customers actually do on volume.

And I think as I step back from telecom, no matter who you talk to on our customer base, what you are talking about is how deep do they have to take forever as opposed to what the conversation just was a mere 24 months ago, which is will we ever need fiber again, right. And that fundamental shift I think is encouraging, how the microeconomics are going to work of our product sets, demand, cost, etc.

let’s get into that when we get together and try to work.

Okay, and just lastly, Jim, when is the first year you think Corning will go back to a full effective tax rate?

I don’t think it’s happening in ’07. I think ‘08 would be the first year it could happen and a lot will be dependent on what we are doing in North America income, so definitely not next year but it could be ‘08 and what will begin doing for (inaudible) in ‘06 and ‘07 will look like if that had been the case, cash tax is obviously still quite a ways away.

Thank you.

Thank you, just taking a look at kind of the price decline this year in terms of glass, you know, looking like in excess of 20%, is that the new kind of expectations for this market especially with your commentary about the shift to higher GEN sizes. I know you are not giving ‘07 guidance but should we assume that type of price declines as they move into next year as well?

Well, I wouldn’t necessarily do that, I mean we do have the mix effect which Jim has already -- he talked about and I talked about, which really you know, he has been telling you much about the dynamics is just math, right? And you’ve already seen that reflected in this year.

Beyond that, I just think it’s too early to tell. The factors are going to be glass supply demand and balance effects and we just need to see how that Q4 looks to get a better feel for that.

And be able to offer better guidance on that Then the point that Jim just made of seasonality, and how does that impact and we want to make sure we do it, I think our customers want to make sure that they do not overreact to that seasonality but instead stir our way through it in a more reasonable way. So I wouldn’t conclude from this year any fundamental shift other than their model of the mix affect.

And then there let’s see what the end market looks like in Q4 and how everybody reacts.

Just a quick follow up. I mean, in looking at a couple of years do you see any change in terms of -- you know, you got three big players in glass market you know, in three or four years, you’re just going to have three big players as well?

As we analyze this, we don’t see a lot of major moves going on in terms of market shares. There is an awful lot of dynamic that goes on, in total the market is large and the folks who are in it have done a good job of lowering cost.

And so we still think that the industry structure, we don’t see any major shifts coming in the near-term

Okay, thank you very much.

Hi, I got a demo of Cisco’s new TelePresence product last week and the project leader told me that they tried very hard to get the display size below 65 inches. But found it impossible because the smaller sizes couldn’t provide a realistic experience.

Ignoring Window’s budget constraints, what’s your perspective on the optimal display size at typical viewing distances?

Beyond the CFOs capability to estimate that but we clearly -- you know, we are doing a lot of work on whether people -- you know, people are just moving up and we are seeing our customers talk about where -- like what LCDs would be in the 40s now, not moving up into the 50s while there is a 65-inch out there. I know this from the circular last Sunday, nice price on a 52, and we want to see when we are having that.

Still recovering from the joke at my expense on my budget cap and Jim was that comment about your ability to complete referring the windows budget or the display advice.

I think that we just haven’t done enough work on this Jeff, I think you make a great point and frankly as I am sure you remember, I was saying previous to really this year that I didn’t see LCD TV really breaking big into the above 40 inch market and I thought that our customers were being overly aggressive and I have ended up being very wrong. I think LCD is doing very well in the 40 to 50 and now our customers are saying something very similar to what you and Cisco were saying which is, hey, I think we can go bigger economically and I think the customer will want it.

Once again I’m hearing conservatism finds that a little bit hard to believe. But we will be doing a more work on it Jeff, very good question.

Great, one other quick thing as Jim pointed during the prepared remarks, the relationship between sequential growth rates in SCP in the wholly-owned display’s business varies widely quarter to quarter. Could you share your thoughts on the likely revenue split between the two businesses for 2007?

We were notoriously wrong getting this balance between Korea and our wholly-owned business. It seems we always have to adjust part way through the year.

I think clearly you know, our alliance with Samsung has been very beneficial to us and they are doing very well in the end market, along with their connection with Sony. We continue to have very large share there too and they are very successful in the end market.

So you know, it’s not clear to me that you would see any big fundamental shift between Korea and our wholly-owned business. Obviously it will up or down a few points during the course of the year but you know, difference to what prior years but I don’t think we see a reason for that to be a fundamental shift.

Thanks.

Hi, good morning, Jim just going back to the gross margins if you look at the roughly 160 basis point improvement. Can you talk about the pushes and pulls and how much of that improvement was do directly to LCD glass and what were the other drags accounting for it.

For the corporation state?

Yeah, just looking at the corporate gross margin and how it go to where it did through the September quarter.

Display was really the fundamental you know, driver of that where first of all we have to come back from the absence of the lightening strike. So that was the biggest portion of the biggest change and then the negative against that was you know, our telecom revenues, I am not talking sequentially for telephone, we were down and that was a drag buying with you know, some lower prices.

But can you put the numbers around it how much of the basis point improvement was do to LCD?

I mean it really was driven by LCD, LCD overwhelmed every thing else.

Okay, and then just looking out to next year’s CapEx, you mentioned that it would only be down slightly. Given that your customers have pulled in some capital spending and I think the amount of capacity coming on at the customer level is roughly 35% or so next year.

How did that factor into your thinking for CapEx for the next year?

While your recall the question Steve, for someone asking for a general indication and so all I said was you know, it’s going to be down I mean, I am not giving guidance for next year. Then clearly you know, we pace and have for a while paced our display capital spending against what we think we need to have capacity.

We did add quite a bit. And so display capital that will be down year over year, but I’ve got to wait till February for me to give you final numbers.

Okay great, thank you.

Hi, good morning. I know you said that it was difficult to predict how they are going to act but I -- it seems kind of logical -- now that Verizon is no longer ramping in terms of the number of (inaudible) stick with three.

Could that mean that they could smooth out their buying patterns at all and you’re big enough to (inaudible) that you have enough pull with them and you, you know, get them to even it out of a bit.

So to Verizon stand at three million tasks, would then even it out. Remember what Jim said in the opening about half of our revenue opportunity happens during the task, but the other half which Jim call the second the revenue apple, happens when the can connect when customers call them and say listen I want to sign up to file service and they go out and they install that connection between the home and the access point.

So I don’t think the connectivity is going to be more predictable than the past. If anything it could be a little bit less.

That been said, the way in which the cycles work on the buying cycle versus the actual project installation rate, it’s been more cyclical then it would need to be from sort of theory of constraints pull approach. And it’s always the opportunity that Verizon will get better and better at managing the project and find a way to smooth it out.

As to -- we are big enough supplier than to have any clout with them on this. So yeah we are a big supplier there is just no question that Verizon is the customer here, we don’t have clout we react to their request.

John Harmon - Needham & Company Okay, thank you.

Thank you, great quarter guys just two quick questions. I was wondering in the implied guidance of 20% to 30% growth in LCD, if you can just comment on the impact there of Asahi, I think someone had ask about that before and you said it was very negligible, but I’m just trying to get a sense of magnitude there?

I didn’t mean to use the word negligible. It’s certainly a smaller part of this you know we are looking for a very strong quarter and it’s embedded in there.

But remember you are talking about their -- what we think might be the trend going out is, some 3% of the world’s market so it can’t have that big of impact on us. But it is embedded in there to a degree that our customers have called and have asked us for more and it was it due to that buy so.

Okay and then the quick response that you would be having there would be at pre-determined contract pricing, it wouldn’t be at any higher rates?

It would go out at the rates we will agree with.

I see and then the last question on the Dow Corning side. Can you just talk about how impactful Hallmark is to that total number?

It’s very important to them, Hallmark has grown to be from 10% of their overall revenues to, and I think this year maybe 17%. So obviously very profitable but we’ll point it out that their silicon business is also a good profitability in Q3.

So there is no question about Hallmark has been very important to them last year, this year and we think we will continue to be so in the next couple of years.

Great, thank you very much.

Thank you very much, a couple of items. As you mentioned I mean on the previous question the potential supply disruption from your competitors’ non impacting pricing.

As you think about 2007, given the fact that short-term supply demand actively doesn’t really seem to impact the contract pricing. Once you do your negotiations at the beginning of the year, given the fact that you don’t expect that mixes going to impact your average pricing, you guys should have pretty good visibility in terms of what the pricing pressure is going to be through the course of ’07, is that correct?

So, I think you may be over estimating our visibility. Well, in Q4 the reason Jim is saying that we are not anticipating any short fall, any potential short fall the part of our competitors to impact our quarter of low pricing is that we had already reached agreements with most of our customers and when we are going to supply at what price and if they come in with additional demand we just do that as part of us being a good supplier to respond to that.

But the pricing has proven to be really sort of anything but predictable this past year, other than directionally and as we said at the beginning of the year we expected the price point to be under pressure. This year more so than in past years and as we come into February, we will give you what our feel is for next year, but I would not portray that we have really strong visibility there at this point of time.

We will do our best to analyze, get a good feel of that demand supply balance for next year, and what sort of the impact the seasonality would be, we will do our best to provide you what visibility we have.

And then one last question, you talked about the potential to pickup some market share in the LCD business at the end of this year, could you talk a little bit about your underlying market assumptions in terms of substrates just so that we have a better idea in terms of how much share potential that you are looking for and given the fact that it seems like most of this is not coming from the competitor’s production issues which you anticipate that the share that you pick up for during the year that you will continue that and hold on to that share in 2007?

So, I think that share is very hard to reach any conclusions on a quarter to quarter basis. And we are not setting out to gain a significant amount of share what were the other here.

So, I think share is best viewed in sort of an annual basis and over this week of time, and we will provide some insights about that as well, as we go forward but I don’t think this is -- you should over emphasis the share gain in Q4 due to this production short fall. It’s hard for us to tell how big this production short fall is by our competitor.

And how long it will last, and what its nature is, and how quickly they will recover. So, I just wouldn’t conclude too much from this here now.

Okay, thanks.

Great, thanks very much I was wondering if you could just comment on two questions, one is I don’t think I heard somebody answers to the prior question exactly when you start to renegotiate the glass pricing for next year, number one. And number two, if you could just talk about how you expect the profitability in the diesel business to develop as we you know, think about achieving some of these long-term targets, if you could just refresh our memories on that, thanks?

Well, last couple of years we’ve done Q1 pricing in November beginning in December period and I can’t imagine why that would be any different this year for display. On diesel, we expect gross margin to improve every quarter going forward.

Q4 would be ahead of Q3 and I would expect that the market behaves as we anticipate and volume increases every quarter next year. Then the gross margin will move up and that’s the primary thing that we’ve been waiting for is we get some real volume.

We where talking about now our diesel revenue this year, all and done, probably $188 million should be going up substantially next year. And we are looking for to contribute our gross margin each quarter as we go through.

And we think we past the impact to the pre-buys we get to the back half of next year and you’ll just start to get a better idea what run rates look like in this business. You know we got -- brief the improving our manufacturing as we finally get to make quantities and you’ll see some real contribution --on the run.

Okay, thank you.

Thank you. I just have a couple of closing comments including some Investor Relations announcements.

Katherine A. Asbeck, our Senior VP-Finance will be representing at the Western New York Investor Conference in Buffalo on October 31st will be presenting at the UBS Global Communications and Technology Conference in New York City on November 14th.

And I’ll be presenting at the Credit Suisse Annual Technology Conference in Arizona on November 28th and also the Lehman Global Technology Conference in San Francisco on December 7th. And we’d be delighted to see you at one or more of these events.

Regarding our Q3 results and Q4 guidance, we are certainly on track for another very strong year for both revenue and earnings growth.. Revenues grew 10% earnings per share, excluding special items on page 12 more than 25%.

Gross margins will average between 44% and 45% which will be the highest in our reporting history including the big sales year 2000. I hope investors are as pleased as we are with performance of the company to date and our momentum heading into Q4.

Jim.

Thank you, Jim. Thank you, Wendell and thank you all for joining us today.

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